Selecting the right coverage

When it comes to the Affordable Care Act, one word keeps being bandied about - affordable.

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By Michelle Singletary

recordnet.com

By Michelle Singletary

Posted Oct. 2, 2013 at 12:01 AM

By Michelle Singletary

Posted Oct. 2, 2013 at 12:01 AM

» Social News

When it comes to the Affordable Care Act, one word keeps being bandied about - affordable.

White House officials were elated last week about a report from the Department of Health and Human Services finding that premiums in the new health care marketplaces are priced lower than expected.

The average premium nationally for a midtier plan, meaning one with the second-lowest cost, will be $328 a month before tax credits, 16 percent below projections by the Congressional Budget Office. The administration keeps emphasizing that many people will qualify for a subsidy that will bring that price down. About six out of 10 of uninsured consumers will be able to get coverage for $100 or less per month when taking into account premium tax credits and Medicaid coverage. However, for others, especially those who don't qualify for a tax break, a policy could be hundreds more per month.

So how will consumers shopping for health insurance determine what's affordable to them?

When I asked a 29-year-old California man recently, he paused and said, "I think $150 or more a month would be out of my reach."

I asked him how he came up with this figure.

"It's just something at the moment I feel I can afford," said Josh Nece, an uninsured restaurant server in Oakland. "Already I have so many things I have to pay a month just to survive."

Following up, I then asked Nece how much he spends on his cellphone, cable or Internet service.

He knew right away where I was leading him. He doesn't have cable. His cellphone and Internet cost about $100.

"I see," he said. "Health insurance is something I need to survive. I guess I can't afford to play the game that you hope nothing happens."

When you shop in the marketplace, you will find four categories of plans: platinum, gold, silver and bronze.

Regardless of the level, all the plans will offer the same essential benefits. But you decide your premium level based on how much you want to pay out-of-pocket for health care services. If you opt to get a plan with a lower monthly premium, you'll have higher personal costs. If you elect to pay a higher premium, you'll pay less upfront.

Here's my advice. Don't be penny-wise and pound-foolish. If you know that you don't save well, don't get a plan with a high deductible. All three of my children have asthma. If I were shopping in the marketplace, I would go for gold or platinum. If the costs of those premiums are too high, opt for the second-lowest-priced plan.

What's reasonable to government officials may not be viewed as affordable to folks who are healthy. But with the high cost of getting sick, many people will have to push their financial comfort zone. Don't bargain if you don't have to with your health and your financial future.

Contact Michelle Singletary, a finance columnist at The Washington Post, at michelle.singletary@washpost.com.